Government makes U-turn on pickup truck taxation loophole

The government has made a rapid U-turn on its plans to change the taxation status of double-cab pickups  – a move that would have affected thousands of farmers and pickup owners across the country.

The proposed changes would have classified double-cab pickups as company cars – not vans – for taxation purposes, leading to company car tax being based on “benefit in kind”, which is calculated by taking into account a vehicle’s carbon dioxide emissions and list price.

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The closing of this tax loophole would have resulted in a significant hike in tax charges for pickups, which would have been based on their high carbon dioxide emissions.  

In a statement on Monday 19 February, HMRC said it had listened to the views of farmers and the motoring industry on the negative effects small businesses and individuals could face.

This, it said, would not be in line with government’s wider aims to support businesses, “including vital motoring and farming industries”.

The statement said double-cab pickups will continue to be treated as goods vehicles rather than cars, and businesses and individuals can continue to benefit from their historic tax treatment.

Nigel Huddleston, financial secretary to the Treasury, said: “We will change the law at the next available Finance Bill in order to avoid tax outcomes that could inadvertently harm farmers, van drivers and the UK’s economy.”